There are two consequences of this. The first is that under section 656 of the Companies Act 2006, we are required to convene a shareholder meeting to discuss this with shareholders, as well as outlining how we will endeavour to improve the situation in the future. The second is that the Directors' borrowing powers under the Articles of Association, which are calculated by reference to a multiple of shareholder funds, are effectively removed. We will need to modify this clause to ensure the Board is able to obtain the short term financing it needs to develop its interests in Guinea and cover corporate costs.
Another way to put this is that AVM are insolvent!
Why not just wind the company up and give the assets to Elliott as major shareholder? Borrowing more money from them is only delaying the inevitable. Probably because the directors are still taking home the pay cheque and will continue to do so for as long as someone is willing to pour money down the drain...
Paul

O/T
G.S. thanks. I'll look into it. Article last night in eurasianet.org by Joanna Lillis said there are worries about the Kazakh Tenge devaluing again this Feb., so that is one minor, extra reason to get into GBGR before it happens!

O/T
Had it on watch for years but was always more interested in ex-HMB (now GBGR)
You will note with interest one of the non-execs ;-)
http://www.investegate.co.uk/hambledon-mining-plc/rns/change-of-adviser-and-directorate-changes/201302201452553253Y/

G.S. Yes, agreed. Another one to look at with similar leverage, I wonder, is TSG (relatively short mine life provides the leverage?), and that will get a temporary benefit from rouble devaluation, but that is probably all in the price already.

I am not invested here. Wish I was. This morning's reduction in cash costs and increase in production for the 4th quarter looks good. The reduction in "waste mining" must be due to shortening the mine life by high grading it. I recall they took a write-down for shortening the mine life in a previous set of results. The only fly in the ointment then was this:
"In light of the strike and the uncertainty around the life of mine, these discussions have continued in order to apprise them of the situation and maintain their support. "

Polaris, it has been some journey with AVM
I read your comment in #1541 "AVM continues to be a basket case that has been gutted by the Henry hedge." ; I totally agree and well flagged by you and me over the years if i recall correctly.
News today 12 DEC 2014
http://www.investegate.co.uk/avocet-mining-plc--avm-/rns/end-of-strike-at-inata/201412120700135782Z/
Observe "Damage assessment and assessing options for a return to operations may take several weeks."